Government Versus Markets – A Change in Financial Regulation

Kammel, Armin J.

doi:10.1163/9789004280328_003

Cited by 1 publication

(2 citation statements)

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“…Or on the other hand, should enhanced regulation be implemented to protect investors from losses taken on uncalculated risks or obvious mistakes? Unfortunately, as Wiess & Kammel (2015) point out that when an incident occurs, regulators pressured by shortsighted politicians tend to favor over-regulating the markets; the paradox here is that while there might be public and political support for such measures due to fear and Transparency and Information Asymmetry in Financial Markets uncertainty, the public is not always fully aware of the practicality and longterm consequences of such new measures (p. 16).…”

Section: 42mentioning

confidence: 99%

“…In Support of Kammel's (2015) concept of the regulatory pendulum (p. 19), we can witness financial markets' deregulation, which initiated in the 1980s, and was justified from the perspective that markets are largely efficient and rational; complacence regarding increasing prices of homes in the 2000s also reflected the approach that prices are innately rational (Appelbaum, 2013, para.11). However, the severe implications of the financial crisis swung the pendulum towards stricter control over various sectors of financial regulation, including banking supervisory regulations (Weiss & Kammel, 2015, p. 25).…”

Section: Critical Reflection Of Eu Investor Protection Frameworkmentioning

confidence: 99%

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Transparency and Information Asymmetry in Financial Markets

Aharon

2023

BRP Int. Bank. Secur. Law

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The paper deals with the application of aspects of behavioral finance in the context of investor protection reflected in EU financial regulation which puts an emphasis on disclosure requirements. Traditionally, financial regulatory frameworks maintain a status que assumption of “rational investors” contained within neoclassical economic theory, however reoccurring financial incidents have exposed a critical flaw in this understanding, consequently requiring a further examination of behavioral aspects within the context of financial regulation. It remains ambiguous how regulators may best use findings from behavioral finance to address flaws in their investor protection tools. Furthermore, neither expanding disclosure obligations nor enforcing a tougher paternalistic approach may suffice in their intent.

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Section: 42mentioning

confidence: 99%

Section: Critical Reflection Of Eu Investor Protection Frameworkmentioning

confidence: 99%